Canadian investors trust their financial advisors and turn to them for insight on asset allocation and selection, according to a new study released by the Investor Education Fund (IEF).
The study, Investor Behaviour and Beliefs: Advisor Relationships and Investor Decision-Making, provides insight into the learning needs of Canadian investors who have an advisory relationship, including factors that influence investment decisions and investor expectations of their advisors.
The new study comes as a refreshing change at a time when other studies suggest Canadians are skeptical about advisors.
“Investors need to do more to understand how their advisor impacts their investment choices and, ultimately, their returns,” says Tom Hamza, president of IEF. “This study emphasizes the need for Canadian investors to get clarity about the nature of their advisory relationships and to closely match their needs with the skills and capabilities of their advisor.”
The study found that investors’ trust in their advisors’ opinions dominates many factors in the decision to buy investments. However, the survey also revealed that investor knowledge of fees and what affects them is weak and investors are unaware of potential conflicts of interest.
Further, most investors are not aware of what products their advisors are licensed or registered to sell.
A copy of the study is available online at GetSmarterAboutMoney.ca.